Promotion of ESG Principles in the Russian Banking Sector

ESG is an abbreviation for “ecology, social policy, and management.” A bank applying the ESG principle should theoretically implement “green” and “socially responsible” ideas that will help protect it and its customers from various risks associated with climate change and other social problems. The research purpose is to study problems faced by banks when promoting ESG banking principles. The research objectives are to analyze how far the banking sector has progressed toward the goals set and to identify what hinders this progress. In the course of researching, generally accepted scientific methods, system, and economic analysis were used. Banks actively integrate into implementation of the business model based on ESG principles, thereby pushing business to introduce energy- and resource-saving technology, taking care of the environment, and creating favorable corporate culture within companies and enterprises. The ESG banking formation and implementation process is a complex one associated with a number of challenges. Introducing principles of sustainable development, a modern bank faces imperfection and complexity of information disclosure procedures that do not make it possible to impartially assess contribution of each bank to implementation of these principles. ESG banking development requires, in our opinion, continued preparation of public nonfinancial reporting of banks and approval of a unified standard for information disclosure, which is adapted to new international standards.